Have you wondered where angel investor come from and what type of people to deal with and present your plan to? Is it a Donald Trump type of person – flashy and quite wealthy? Or is it someone more like your neighbour down the street who is quietly amassed a small fortune yet live prudently? The truth is angel investor could be either a person or a group of people.
The stereotype of an angel investor is someone who is a hardened business entrepreneur who has amassed great wealth but is always ready to earn more. Picture someone who is swoops in, evaluates the business plan, does some inquiries and then funds a start up with the expectation of high returns. In reality, the angel investor may not be as wealthy as you think but they are financially savvy. Most are still employed but they are looking for a way to grow their money by promoting innovative new business.
Angel investors fill a gap that exists between the venture capitalist and the commercial lender. Venture capitalists and financial institutions lend larger amounts with the former willing to accept high risk and the latter expecting minimized risk. Many angel investors invest smaller amounts of money, $20,000 instead of $200,000, but there are no limits so $500,000 up to $2 million is possible. They don’t want to play an active role in the business, but do have business savvy. Mostly they just want to make money.
Angel investors are also groups of people who pool their money to fund startup businesses. They include investment clubs, professional groups like doctors or lawyers and even other entrepreneurs. The reason there is a bit of mystery surrounding angel investors is simply because they keep a low profile, so are difficult to categorize. What you do know is that they are financially savvy, thorough in their evaluation of businesses and hopeful of earning a high return on their investments. So don’t stereotype angel investors because they can be anyone.
More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com